Has economic freedom been oversold? That was the question asked (and ultimately answered) in a new paper by the research arm of the International Monetary Fund (IMF). The agency is the international “central bank to central banks” which swoops in and provides cash to bail out entire nations – for a price, of course. That price has always been a little bit of austerity for the government and de-regulation all around.
The guiding philosophy goes by a handle which may seem off to many in the United States – Neoliberalism. It was a response to the failure of classical Liberalism, or reduction of state power in favor of free markets, which failed in the last Depression. This depression seems to have been about as kind to the general concept for many of the same reasons.
As always it’s worth talking about in the sense that we are again confronted with the possibility that “everything the experts know is wrong” – a feeling certainly stirred up elections throughout the developed world lately.
I originally intended to update this position from four years ago, but honestly not a thing has changed. In many ways, it continues to become worse. So here it is, no changes at all.
Are you better off now than you were so many years ago? It was a question first raised in the 1980 campaign, a motto used to defeat President Carter. The answer then was a rather sure “No!” and the voters responded, blaming the man in charge. But are you better off now than then? And was it fair to blame Carter or any President for the state of the economy?
A few graphs showing the state of workers in the Postwar Era (1947-today) shows how the problem persists. Sen Sanders has often said that the last 40 years have been a slow retreat for workers, and he has a point. But who is to blame?
Let’s leave blame aside for a moment and check out the numbers first.
The rapid pace of change has created a world filled with excitement and energy. At the same time, it’s created a world filled with anxiety and fear. At the intersection of both of these is hatred, distrust, disrespect, and every other force you can think of which can divide people. Rather than bring us together, closeness has us running to define boxes to hide in, regardless of how small.
The great force which should unite but instead often confuses and separates is the driving force of our time: technology. That one simple word is the savior and excuse all at the same time. But what is it, really?
Economics is nothing more nor less than the study of the primary way in which people connect with society and get on with their lives.
In everyday life, you may interact with a few people – family, colleagues, and friends. But through the process of eating and paying the mortgage you interact, at some distance, with hundreds more. Because this interaction is entirely through something called “money,” a way of keeping score, it’s very tempting to look at it entirely through numbers. The dizzying details of tens of millions of exchanges every day makes a top-view in bulk the most desired method of analyzing how things are going.
Yet this process has proven wrong over and over again. The failure of economics, particularly macro-economics, is the primary reason why the only true study of an economy has to be a People’s Economics.
Life has a way of happening. Sometimes, you can make it happen, despite what the inertia of the world is hurdling you towards.
This is about the start of a personal journey. I am now married to a wonderful woman, Raquel, who is from Shenyang, China. We will be moving together to San Francisco next week. I do not want to dwell on personal details, especially given that Raquel is even more private than I am.
But it’s a great adventure all the same. And there are some aspects of it that I think the world might be interested in.